Am I required to give a new TPA who is replacing me a copy of the Plan Document

[RayJJohnsonJr]

Am I required to give a new TPA who is replacing me a copy of the Plan Document?

[Lou S.]

I assume you've previously provided the document to the client so you could just direct him there. If the client doesn't have it you can charge reasonable fees for providing another copy. That said what comes around goes around and it's a pretty small industry. In days when it's pretty easy to just e-mail a copy of the Plan Document I typically just do so unless there are outstanding fees unpaid fees I'm trying to collect from the old client.

[shERPA]

What @Lou S.says.  This was a much bigger deal BITD when we had to send hard copies.  I've always liked to maintain good working relationships with other TPAs, so I will cooperate and email unless there are outstanding fees. 

[RayJJohnsonJr]

Ordinarily I'm cooperative, too. This case is different because: 1) I'm also the advisor and this group undercut me and they have no idea what they're doing. He called me obtain records, when I asked who the TPA is he didn't know what a TPA was. Never heard of it. He says anyway, the the plan sponsors administer it themselves and said they file the 5500's. Of course we prepare the 5500's.  These are Dr. Offices, they have no idea what a 5500 is. It's 4 companies and I charge only $1,500/yr for Admin because I'm also the advisor. I saved them a ton by using a common trust and worked out where they only have to file 2 5500's. I don't want to give these people my trade secrets. I told him to pass GO and find a TPA right away as in now! Even if doesn't know what one is. His whole selling point was that he's local in AL and I'm in FL.  Well I go every there year, put on employee education meetings, and meet with every employee who wants to privately, which is almost everybody. I'm there 2 days. 

So, yeah, I'm a little miffed and not enthusiastic about teaching my competitor what it's taken me 35 years to learn. So, the advisor who knows nothing tells me I'm required to give him the document as if it's a regulation. Like someone said, the plan sponsor has it. 

[Lou S.]

One way or another, whoever ultimately does the admin will need a copy of the current document to administer the plan, even if they will be amending it on to their document as they will need to make sure any changes don't violate 411 cutback provisions. whether they get that document from you or the client I'll leave to you.

But you are under no obligation to explain the document to the new group. The new group is not your client, you don't have a service agreement with them. You could certainly send anything directly to the client and let them decide what to send to new group.

[RatherBeGolfing]

46 minutes ago, RayJJohnsonJr said:

So, yeah, I'm a little miffed and not enthusiastic about teaching my competitor what it's taken me 35 years to learn. So, the advisor who knows nothing tells me I'm required to give him the document as if it's a regulation. Like someone said, the plan sponsor has it. 

The plan sponsor might have lost it like they lose most things....   If that is the case you probably have a duty to provide it to the client (perhaps for a reasonable fee)

[pmacduff]

That's what we do - tell them that the client can request a copy from us if they can't find their copy.  Then we send it to the client and let them provide it to whomever....

[RayJJohnsonJr]

I like the points you are all making. They give me two ideas. 1) have the new TPA copy me on the new document prior to execution and I can list the changes they are making so they can avoid violation of 411 cutback provisions and be able to provide necessary Notification(s) to all employees of Plan changes. 2) I could provide a list of the elections made in the Adoption Agreement and if the new TPA had questions, I could answer them. Open a dialogue with the new TPA.

[Gadgetfreak]

1 hour ago, RayJJohnsonJr said:

I like the points you are all making. They give me two ideas. 1) have the new TPA copy me on the new document prior to execution and I can list the changes they are making so they can avoid violation of 411 cutback provisions and be able to provide necessary Notification(s) to all employees of Plan changes. 2) I could provide a list of the elections made in the Adoption Agreement and if the new TPA had questions, I could answer them. Open a dialogue with the new TPA.

Sounds like you are offering to do even more work for no compensation. I like the other options better - either give the doc to the new TPA or the client. Charge the client for your time if they want to "review" it with you.

[shERPA]

I agree with @Gadgetfreak.

[QP_Guy]

On 6/22/2021 at 10:44 AM, RayJJohnsonJr said:

Am I required to give a new TPA who is replacing me a copy of the Plan Document?

Required by whom?  I can't think of a legal obligation to provide anything to a non-client.   If anything there'd be a strong presumption against providing anything to a non-client.

 

If you are a member of a professional association, there may be an industry ethic to abide by.  Are you a member of ASPPA?  Check out https://www.asppa.org/member/code-conduct 

[Pam Shoup]

Send the document to the employer.  Don't get involved in anything else, unless compensated.  It sounds to me like they are going to be in trouble in a few years and you don't want someone trying to say that you are liable.  In the future, you may want to include in your 408b-2 that there is an exit fee and that a standard set of documentations will be furnished for that fee (5500s for two years, plan documents, SPD, trust, etc.).  We include everything on our list that a new provider should need to use to prepare the 5500 for the time period in the plan that the plan was under our control and if they ask for more, tell them there is a fee.  We include language on the exit package that we no longer sponsor the document once it leaves us and make sure we put in writing the last 5500 we are responsible for preparing.

[RayJJohnsonJr]

Great advice from all of you.  Thank you.

[austin3515]

Life is too short.  Be Kind and send the Doc.  It sucks to lose one believe me I know, but I don't see how withholding the document improves your situation one bit.  You lost the case either way.  And trust me your client will never forget you were a challenge to deal with in the transition and they might even tell their friends.  Like others have said I bend over backwards for new TPA's when I lose a case because clients will never forget one way or the other if you were gracious and cooperative or a curmudgeon. And hey I can tell you clients have fired us and then realized what they were missing and came back (which they would not have if I chose the curmudgeon route...).

[RayJJohnsonJr]

Thank you, Austin. 

[BG5150]

I also try to treat new TPAs with courtesy and even kindness.  We often take over cases from TPAs to whom we've lost business.  Why be a jerk to them if someday you may need stuff in return?  What goes around comes around.

As to the original post.  There is no rule that says you MUST provide anything (unless, like Peter said, it's in one of your agreements with the client). 

But, also like others said, I would work with the sponsor.  Say something like "let us know if you need anything."  The let the new broker know that you are working with the client, and will send them the plan document you have "as a courtesy."  (What stinks is when you get a letter from the client saying "please provide any information our new jerky advisors or recordkeeper or TPA asks for."  Then you gotta deal with those guys.)

I would make sure that you caveat anything you send to the client with "these are the latest documents/reports that we have."

[Ilene Ferenczy]

One more thing ... when you send the document, if it is your preapproved document, be sure to remind them that they cannot rely upon you anymore to keep the plan up to date.  That will let them know that they must amend onto another document (and if the "new" TPA doesn't have one, it will highlight that.  Second, when they get nailed by the IRS for having their plan out of compliance, and they come crying back to you, you will have proof that you advised them that you don't do that anymore for them.

FWIW.

Ilene

[austin3515]

Off topic but anyone know why our logos are outfitted with rocket ships?  Did the Bakers end up making into space before Jeff Bezos? 

[RayJJohnsonJr]

I just got to the bottom of who I'm dealing with: A ABC insurance co, representative with 1 year of experience in the financial services industry.

[thepensionmaven]

Figures.

[Dave Baker]

@austin3515We had bid $27.5 million but the other guy got it at $28 million. Dang. Maybe next launch.

As for the rocket ships, your humble servant is still trying to determine what and why. Seems to be a lagniappe with a security upgrade from the software vendor, which I applied this morning. It's always something...

[austin3515]

Well I think this site is out of this world 😂

[Dave Baker]

@austin3515The settings have been identified and changed. Although it was fun to be a rocketeer for a minute there...